I still think it’s worth acting as if it did cost. What % of your capital is tied up in the guest quarters and what proportion of the utilities etc. does it consume? What would it bring in as a LTR? Otherwise we’re at risk of letting our listings at below market unsustainable rates - the race to the bottom.
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As far as I’m concerned zero percent. This capital can’t be redeployed to another use so it’s not capital in the classic sense of the word.
I have no interest in making it a LTR at this time but having a roommate I could maybe get $500-$800 a month. But then they would have access to my entire home. It wouldn’t be unreasonable for a roomate to have friends over for a cookout, use my common space, put their things in my cupboards, move some of their furniture in, entertain romantic partners who also start sharing my space and seeing me in my skivvies. They might have a pet or ask if they could get one. They would probably use more utilities. In contrast I’m averaging about $1000 a month at 80-90% occupancy. I have my space available for friends and family to use. If there is an emergency I don’t have to kick a roomie out because I need that space for another use. It’s more money, less use, less commitment. It’s not even the same league much less same ball field.
This is definitely one of the challenges Air hosts have to face. Hotels competing against one another are all competing for the same thing and the same goals. Hosts have different reasons for doing airbnb. A host in my neighborhood might look at my listing and resent that I get as little as $40 a night for a single person. They might wonder how I can “afford” to rent out my brand new, top notch space for so little. What they don’t know is that I’m actually a lonely millionare who looks forward to the visits of my guests. They don’t know that I actually refund all the guests in cash in return for a good review and that’s how I get 98% 5 star reviews and zero problem guests. Obviously no one can compete with that and yet, they have to.
Now, in all seriousness, I do it to make money but aside from my expenses what I make is 100% profit. I consider every cent to be my pay. I live here anyway and I make very few changes to my schedule and life in order to do it. I clean the room in my spare time so to speak. And I’m about to have a guest here for the next 8 weeks and I will only have to clean once a week but he isn’t getting a discount because he’s booking six days at a time. He also pretty much just sleeps here and is gone about 15 hours of each 24. I’ve hit the jackpot. I’m not sure how to calculate the value of this particular client compared to the others I typically have but I’m over the moon with delight and that’s worth more than a set dollar amount.
I feel similarly about preferring str. I do think Air in general takes advantage of people just thinking it’s their spare room and not worth anything. I get a bit more than LTR, but should get more. Airbnb keeps on telling hosts to put their prices down and they oblige without even checking local rates or referring to house prices or rent levels. Hosts get 4 stars for value when offering a private room in a top area for less than a youth hostel. It’s all gone wrong.
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Aiee, that’s not good 
It’s not fair to expect guests just to guess. Did you get shown around?
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That sounds awesome! I need to come stay at your place sometime. 
For some. For me, it’s never been better.
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That’s great for you, but the general trend for hosts is down. Today I deleted 6 suggestions from Airbnb to lower my prices and they are plenty low enough. Personally I will probably end up trading up for a separate rental.
Yes, yes, yes.
And hosts respond and do put their prices down. So their neighbours do too and before long, there’s a price war running and only the budget-crazy guests are the ones who win.
It’s not just a case of hosts not checking their competition, they also seem to often pay no attention to their own costs of doing business - so they’re running at a loss. This hurts us all because a) those hosts will soon drop out making Airbnb seem unstable and b) they give the public the opinion that Airbnb is ‘cheaper than hotels’ and a budget-option. Okay, sometimes it is a budget option but often Airbnbs are unusual places to stay that are far more original and fun that traditional forms of lodging - and not necessarily cheaper and just for backpackers.
The other problem when hosts cut their nightly rate to a price that can hardly sustain their business is that they start to charge (or want to charge) for every little thing which again isn’t good for our image - it implies that we all ‘nickle and dime’ our guests.
Sorry, minor rant there.
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The trend in what? Pricing? And what is this based on? That is what is your source for this information?
Yes pricing. Looking at ridiculously cheap nightly rates in expensive parts of London, Manchester etc… It’s just not enough to pay the mortgage or get a return on capital investment, or a minimum wage serving it.
Do you also look at how often those places appear to be booked. Do you click on the listings and see if the advertised rate is the actual rate. Is the calendar even open at all?
In my market my prices and those of my competitors has remained remarkably stable.
Yes the rates are genuinely way too low. The UK housing crisis means a property might cost several times more than something similar in France or Spain, yet people seem to expect to pay the same.
Okay. I’m sorry to hear it’s not cost effective for you. In my situation I feel like I won the lottery.
I am pleased for you. I do really enjoy the guests 90% of the time and I do get more than a LTR, so life could be worse. However I know I am not paid what my service is worth.
Other things are undercut to an uneconomic level. For example students undercut qualified teachers when it comes to tutoring, so the rate can go down to the level of a cleaner.
Yes Chloe, I always delight when those little special touches make an average stay something they will remember!
Hi,i have a basket filled withcereals,cold and hot,breakfast bars ,biscotti,cocoa.on
your self. Works great
shelf in refrig. I have English muffins,raisin bread butter and jams. Coffe pot is all ready to plug in electric kettle and tea is all set also. I leave cereal bowls near the basket with the cereals, cups and saucers near the coffee and tea station,with silverware,napkins,etc, half and half for coffee and milk for cereal and tea.all is help yourself,
We provide oats, muesli, milk, tea, coffee, spreads and butter and bread. We used to buy a fresh loaf for each guest (we rent out our whole place) but i’d say 3 out of 4 guests didn’t eat it and as such it would generally go to waste. So now we have a selection of breads in the freezer available. It’s such a simple breakfast that we offer (and hardly costs anything at all) but we still get so many people complimenting it !
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I used to make homemade baked goods but found that with so many dietary concerns, it was hit or miss, I offer a kitchenette so most of my guests aren’t really looking to cook in the suite. I offer granola bars, oatmeal, oodles of noodles, teas, coffees, hot cocoa and only powered creamer. This way there’s no spoilage and it’s easy for me to stock up for each guest.
That sounds lovely particularly the home made breads and jams.
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That’s interesting. I live in a major city in England in the West Country and my prices have gone up year on year.
Manchester is obviously much cheaper than the West Country to buy, but seems to be holding prices well according to my friends who do Airbnb there.
In London I do think some people price too cheaply because they don’t keep an eye on market rates.
This is because @Jess1 people tend to already have a property they use for Airbnb so mortgages and ROI isn’t a factor for them as such, as they are still getting a higher return than on LTRs